The Hindu : Business : Xerox India issues pink slips to senior officials

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Thursday, Nov 20, 2008
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Business

Xerox India issues pink slips to senior officials

Shanthi Kannan

Fall in sales of equipment
Shrink in project margins

CHENNAI: Xerox India, maker of high-volume colour printers, has issued pink slips to over 40 senior officials across the country in the last three days, it is learnt.

The pink slip (official notice announcing the dismissal from employment) list includes some associate directors, general managers and senior managers.

According to official sources, Xerox Corp plans to cut 3,000 jobs in the next six months. However, Xerox India, which has over 500 people, is not included in the down-size process.

The officials who were asked to leave were given three months notice and salary for three months. The ongoing restructuring exercise was cited as the reason for giving them pick slips, sources said.

A couple of years ago Xerox Corp had decided to make India as a major centre for its business. As a result, Xerox India was asked to expand its operations in India. As a result, it recruited many for senior-level postings in the last two years. Some of them were now asked to go.

According to sources, Xerox India has strategically downsized these people, who have more than 20 years of experience in the same organisation. The Managing Director of Xerox India could not be contacted despite repeated efforts by this correspondent.

Xerox forecast fourth-quarter profit of 34 cents to 36 cents a share, excluding a 31-cent restructuring charge. The average estimate in a Bloomberg analyst survey was for earnings of 43 cents. The company predicts a full-year profit of $1.14 to $1.16 a share, before the restructuring charge and a 55-cent legal settlement, below the $1.24 average analyst estimate.

The third-quarter net income climbed 1.6 per cent to $258 million, or 29 cents a share, topping the average estimate of 28 cents in the survey.

Chief Executive Officer of Xerox Corp, Anne Mulcahy, was quoted as saying that the cost-cutting programme had been accelerated after sales of equipment fell 2.7 per cent in the third quarter on slowing U.S. demand for production printers. Profit margins shrank on lower prices and higher administrative expenses. The restructuring moves would give Xerox more flexibility in its business and in this unpredictable economy, Mr. Mulcahy said in a statement.

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